VAT on Fuel to Increase, Prices of Basic Commodities to Soar

The prices of basic commodities are expected to go up from July 1, 2023, after Parliament voted to pass the proposed 16 percent Value Added Tax (VAT) on fuel.

The VAT on petroleum products has been doubled, which is likely to result in an overall increase in the prices of goods that are transported to the market. This will include the fare and electricity cost.

The decision to increase the VAT on fuel was made by Parliament on June 21, 2023. The vote was 184 in favor of the increase and 88 against.

The increase in the VAT on fuel is expected to have a significant impact on the cost of transportation. This will be passed on to consumers in the form of higher prices for goods and services.

The impact of the increase in the VAT on fuel will be felt most by low-income households, who rely on public transportation and kerosene for cooking and lighting.

The government has justified the increase in the VAT on fuel by saying that it will ensure uniformity. Currently, the VAT on fuel varies depending on the type of fuel. The government says that the increase in the VAT will bring all fuels under the same tax regime.

However, critics of the increase in the VAT on fuel say that it will unfairly burden low-income households. They argue that the government should have found other ways to raise revenue, such as increasing taxes on the wealthy.

The increase in the VAT on fuel is a significant development that will have a major impact on the Kenyan economy. It remains to be seen how consumers will react to the higher prices.